whirlpool corporation raymond james institutional...

Whirlpool CorporationWhirlpool Corporation

Raymond JamesRaymond JamesInstitutional Investors ConferenceInstitutional Investors Conference

March 9, 2009

22

Whirlpool Additional Information:Whirlpool Additional Information:This document contains forward-looking statements that speak only as of this date. Whirlpool disclaims any obligation to update these statements. Forward-looking statements in this document may include, but are not limited to, statements regarding expected earnings per share, cash flow, productivity and material and oil-related prices. Many risks, contingencies and uncertainties could cause actual results to differ materially from Whirlpool Corporation's forward-looking statements. Among these factors are: (1) changes in economic conditions which affect demand for our products, including the strength of the building industry and the level of interest rates; (2) the effects of the global economic crisis on our customers, suppliers and the availability of credit; (3) Whirlpool's ability to continue its relationship with significant trade customers, including Sears Holding Corporation in North America (accounting for approximately 11% of Whirlpool's 2008 consolidated net sales of $18.9 billion) and the ability of these trade customers to maintain or increase market share; (4) intense competition in the home appliance industry reflecting the impact of both new and established global competitors, including Asian and European manufacturers; (5) the ability of Whirlpool to manage foreign currency fluctuations; (6) litigation including product liability and product defect claims; (7) the ability of Whirlpool to achieve its business plans, productivity improvements, cost control, leveraging of its global operating platform, and acceleration of the rate of innovation; (8) fluctuations in the cost of key materials (including steel, oil, plastic, resins, copper and aluminum) and components and the ability of Whirlpool to offset cost increases; (9) the ability of suppliers of critical parts, components and manufacturing equipment to deliver sufficient quantities to Whirlpool in a timely and cost-effective manner; (10) health care cost trends and regulatory changes that could increase future funding obligations for pension and post retirement benefit plans; (11) Whirlpool's ability to obtain and protect intellectual property rights; (12) global, political and/or economic uncertainty and disruptions, especially in Whirlpool's significant geographic regions, including uncertainty and disruptions arising from natural disasters or terrorist attacks; (13) the effects of governmental investigations or related actions by third parties; (14) the impact of labor relations; (15) our ability to attract, develop and retain executives and other qualified employees; (16) the cost of compliance with environmental and health and safety regulations. Additional information concerning these and other factors can be found in Whirlpool Corporation's filings with the Securities and Exchange Commission, including the most recent annual report on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K.

©2009 Whirlpool Corporation. All rights reserved.

33

Company OverviewCompany Overview


~$19 B Revenues#1 Global Share#1 Global Brand

~$11 B Sales5 Brands30,000 Employees



~$600 M Sales3 Brands5,000 Employees

Leading a $110 Billion Industry

North America Europe

AsiaLatin America

44

Key Investment HighlightsKey Investment Highlights


■ #1 position in global marketplace

■ Leading consumer brands

■ Turning innovation into profitable growth

■ Global operating platform

55

Global Brand PositioningGlobal Brand Positioning


Top consumer-preferred brands in all regions of the world

66

2009 Priorities2009 Priorities

■ Adjust business to demand environment– Production– Cost– Optimize volume and price/mix

■ Execution of structural cost and capacity reduction

■ Provide consumers and trade partners with great value through innovative new products

– Leading provider of energy efficient appliances…great cost of ownership value to consumers


77

Key Operational Drivers in 2009Key Operational Drivers in 2009

Strong focus on every part of the business to reduce costs and generate cash to align to highly volatile environment

Positive Effects Negative Effects

■ Significant product cost reductions

■ Reduced costs in all non-product areas

■ Price/mix

■ Lower working capital

■ Reduced capital spending

■ Demand

■ Material costs

■ Currencies


88

-

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

50,00019

69

1971

1973

1975

1977

1979

1981

1983

1985

1987

1989

1991

1993

1995

1997

1999

2001

2003

2005

2007

2009

E

Historical U.S. DemandHistorical U.S. Demand


Long Term Growth Factors:

ReplacementImmigrationHousing “Normalization”

(T6*

App

lianc

e U

nits

)

(24)%(24)%

99

Removing Structural CostsRemoving Structural Costs


2008 2009E Return to Trend Demand

Breakeven Breakeven LevelLevel

Aligning capacity and structural costs to current demand levels

1010

Component Cost Reduction ExampleComponent Cost Reduction Example


Current Future Est. AnnualComponent Part Number Part Number Savings (mm)

A 150 42 10.0$

B 70 27 8.0$

C 113 28 5.0$

D 180 36 5.0$

E 33 19 2.0$

F 14 4 2.0$

Strong cost and efficiency opportunities…>70 component families

1111

Key Growth OpportunitiesKey Growth Opportunities

■ Energy efficiency

■ Emerging markets

■ Innovative new offerings


1212

U.S. Household Energy ConsumptionU.S. Household Energy Consumption


Space Conditioning48%

Water Heating13%

Lighting12%

Electronics9%

Refrigeration8%

Wet Clean5%

Cooking5%

1313

$-

$500

$1,000

$1,500

$2,000

Operating CostsPurchase Price

Appliance Cost of OwnershipAppliance Cost of Ownership

ConventionalConventionalApplianceAppliance

Source: U.S. Environmental Protection Agency and U.S. Department of Energy


19%Savings

Savings Represent 55% of Purchase Price

1414

Whirlpool CorporationWhirlpool Corporation’’s Energy Efficiency Leaderships Energy Efficiency Leadership

Whirlpool offers more than 300 ENERGY STAR models

OtherOther

Total Clothes Washers, Refrigerators and DishwashersTotal Clothes Washers, Refrigerators and Dishwashers


58%58%

42%42%

1515

Future OpportunitiesFuture Opportunities

Strong cadence of product innovation will continue…design, performance, features, energy and expanded revenues

Thermally connected appliances

Information connected appliances


1616

Breakthrough Opportunities Breakthrough Opportunities ––Thermally Connected AppliancesThermally Connected Appliances

550 kWh/y 200 kWh/y 83 kWh/y 360 kWh/y 710 kWh/y383 kWh/y1166 kWh/y 70 kWh/y

Appliances which generate “waste” heat

Appliances which can use heat wasted from other

appliances


1717

Breakthrough Opportunities Breakthrough Opportunities ––Information Connected AppliancesInformation Connected Appliances


Substantial market growth opportunities

101011001

101011001

101011001

Oven

Microwave

Refrigerator

Dishwasher

Clothes Dryer

Clothes WasherEnergy Controller101011001

Water Heater

HVAC

Thermostat

CircuitBreakers

Personal energy controller

Personal prioritiesFamily schedulesEnergy saving incentive optionsDesired levels of energy management

Set personal energy management preferences:

1818

Global T6* Appliance PenetrationGlobal T6* Appliance Penetration


0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

U.S./Canada WesternEurope

EasternEurope

Latin America Mexico Asia

Substantial emerging market growth opportunities

(% o

f Hou

seho

lds)

Normal Growth Rate: 3-4%

1919

Innovation EmbedmentInnovation Embedment

Input Measures

Output Measures

Mor

e R

esou

rces

th

an O

utpu

tLe

ss R

esou

rces

th

an O

utpu

t

LaunchProof of ConceptSc

alin

g

Sustaining

Creating

Results

Continuous

Improvement

Time2000 2002 20062004 2008

Breakthrough


2009

2020

Innovation ResultsInnovation Results


2121

Whirlpool Value PropositionWhirlpool Value Proposition


■ Appliance demand will recover over time

■ Significantly reducing capacity and costs…lower breakeven

■ Company will succeed in managing downturn

■ Significant earnings power in “normal” demand environment

2222

Closing RemarksClosing Remarks

■ Top priority is to maintain and ensure financial flexibility through this economic downturn

■ Focus on strengthening the foundation of our business– Radically reduce the cost structure and production capacity– Free cash flow generation– Optimize volume/share and price/mix in a challenging consumer

environment

■ Well positioned to create value when demand levels stabilize

Whirlpool is taking significant actions to address current economic trends and to ensure long-term success


2424

Cash Flow ReconciliationThe table below reconciles actual 2008 and 2007 and projected 2009 cash provided by continuing operations determined in accordance with generally accepted accounting principles (GAAP) in the United States to free cash flow, a non-GAAP measure. Management believes that free cash flow provides shareholders with a relevant measure of liquidity and a useful basis for assessing the company's ability to fund its activities and obligations. There are limitations to using non-GAAP financial measures, including the difficulty associated with comparing companies that use similarly named non-GAAP measures whose calculations may differ from the company's calculations. As defined by the company, free cash flow is cash provided by continuing operations after capital expenditures and proceeds from the sale of assets/businesses.

About Whirlpool CorporationWhirlpool Corporation is the world's leading manufacturer and marketer of major home appliances, with annual sales of approximately $19 billion, 70,000 employees, and 69 manufacturing and technology research centers around the world. The company markets Whirlpool, Maytag, KitchenAid, Jenn-Air, Amana, Brastemp, Consul, Bauknecht and other major brand names to consumers in nearly every country around the world. Additional information about the company can be found at http://www.whirlpoolcorp.com.

* T6 refers to the following household appliance categories: washers, dryers, refrigerators, freezers, dishwashers and ranges

Twelve Months Ended December 31 2009 Outlook

(millions of dollars) 2008 2007

Cash provided by continuing operations $ 327 $ 927 $ 700 - $ 800

Capital expenditures (547) (536) (450) - (500)

Proceeds from sale of assets/non-Maytag businesses 119 130 50

- 100

Free Cash Flow $ (101) $ 521 $ 300 - $ 400

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